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Precious Metals

Rick Rule Explains Falling Gold Prices

The Federal Reserve and other central banks keep printing money. The U.S. stock market is soaring. And gold prices, after a brief recovery, have continued their plunge.

Are these phenomena connected? We put the question to one of the world's foremost gold experts, Rick Rule, founder and chairman of Sprott Global Resources Investments.

Listen to his explanation for falling gold prices in the following interview.

And even as gold prices sink, mining costs have climbed. If gold prices keep falling, miners could take "fairly drastic measures" to remain profitable, according to Rule.

Check out Rule's analysis in the accompanying video.

Investing Tips

Margin Buying Surpasses 2007 Danger Levels – Is Another Market Crash Coming?

There's nothing like buying securities with money you don't have – or, more precisely, with borrowed money from your broker, with your investments as collateral.

It's called buying on margin, and it's soaring as the market continues its tear and speculative investors seek a piece of the action. As your stocks appreciate you can borrow even more. A market rally lets you expand your portfolio by piling on more debt.

But it's potentially dangerous and could portend a stock market crash.

As the accompanying chart shows, historically there has been a direct link between a surge in margin loans and corresponding stock market peaks – followed by sharp declines in the markets.

So it's no small matter of concern that the Financial Industry Regulatory Authority reports the amount owed on loans secured by investments climbed to a record high $384 billion at the end of April.

That topped the previous high – $381 billion in 2007, not coincidentally, just before the financial meltdown and the Great Recession.

As a percentage of the economy, the latest margin borrowing totaled 2.71% of gross domestic product.

By comparison, margin borrowing hit 2.73% of GDP in July 2007, during the housing bubble, and 2.81% in March 2000 during the tech bubble, which was followed by a stock market crash.

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Energy Investing

Natural Gas Prices Move as the Switchover from Coal Continues

Natural gas prices have been on the rise in 2013. One of the major contributing factors for the rise, and one that will push gas prices even higher in the years ahead, has been singled out by Money Morning Global Energy Strategist, Dr. Kent Moors a number of times…

That factor is the switch by electric power companies from coal-fired electric generation to natural gas-fired generation. More than 9,000 megawatts of coal-fired generation were retired in 2012 alone.

The switchover is occurring because of two main reasons.

The first reason is how low natural gas prices are – even though the switch is causing a price climb.

The second is that burning natural gas is about half as polluting as burning coal.

Stock Market

Why I'm Calling a Market Top

Party like it's 1999.

I'm not talking about celebrating the new millennium all over again. I'm talking about celebrating the markets roaring ahead, like they did in 1999.

Just remember: There will be a price to pay. There was then, and there will be again.

Look what happened on Monday morning. We got some weaker-than-expected economic numbers and the Dow cut its gains in half… for about a minute.

Then it was like, oh, wait a minute, those bad numbers are good numbers for the stock market, because the Federal Reserve won't be tapering any time soon if the economy is tapering. And the Dow roared up by about 65 points… in about a minute.

So go ahead and party like it's 1999. But if you get hammered by the coming crash, you've got no one to blame but yourself. And it is coming.

We've all been here before. This time it just looks different, but it ain't.

investing tips

The Hidden, Yet Surprisingly Obvious Investing Secret of the Top 1 Percent

It's rare when an investing secret becomes so obvious that it looks us in the eye…

And nearly all Americans completely miss it.

But one such secret has been so greatly underestimated that Nobel Prize-winning economists, investing legends and those considered to be the "best" minds in finance are now finally waking up to its possibilities–and its astonishing track record.

In fact, this secret has been one of the key drivers in the growing wealth divide between the top 1 percent and the average American worker.

It has grown more pronounced in the past three decades: the rich have gotten richer, the poor have gotten poorer, and the middle class has been increasingly marginalized.

Many believe that the ultra-wealthy have achieved their status by either being born into money or by becoming a C-level executive for a publicly traded company. But as Stanford University professor Joshua Rauh explains in a recent study, both of these assumptions are wrong.

The biggest and obvious secret to new-found, extreme wealth?

Investing in technological innovation and the expanding global scale and branding of must-have products and services.

And once you learn how to harness this trend, you'll know how to invest like the top 1 percent and can begin your path to accumulating extreme financial wealth.

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Tech Stocks

The Big Lie in Tech Today

There's a number floating around the tech industry that is nothing short of amazing.

And it adds up to big money…

Here's the thing. Noted tech analyst Mary Meeker delivered a powerful message last week that turned the industry on its ear.

Speaking at the D: All Things Digital conference in southern California, Meeker revealed a stat that explains the force behind the unprecedented wave of tech innovation that's fueling the market's huge rally.

Meeker noted that people are using the Web to share roughly 500 million photos.

Not monthly, mind you. Not even weekly, but every single day.

As incredible as that sounds, it actually gets better — the number is set to double in the next year…

No, that's not a misprint. By the end of 2014, we'll be sharing some 1 billion photos every 24 hours, or 41.6 million per hour.

Talk about a tidal wave…

As recently as 2009, shutterbugs exchanged on any given day roughly 75 million photos. So, we're talking about a more than 10-fold increase in roughly six years.

If that doesn't define exponential growth, I don't know what does…

Trend Watch

Trust Me Dude, Here's How to Invest in Marijuana

The world has turned for marijuana, and the genie is out of the bottle, or should we say the smoke is out of the bong. May 2013 was a big month for those who actually inhale.

Colorado Governor John Hickenlooper signed two crucial bills, House Bills 1317 and 1318, stemming from the recent ballot initiative, Amendment 64, legalizing the recreational use of pot in Colorado, which lay out regulations for the sale and taxation of marijuana.

In Seattle, Reuters reports that ex-Microsoft strategist Jamen Shively announced plans to establish the first American pot brand, importing the weed legally from Mexico and retailing it in a chain of medical dispensaries and, where legal, retail outlets.

Shively's plans have the moral support of former Mexican President Vicente Fox, a conservative. Right now Shively is undertaking a press blitz in Mexico, where he plans to source his marijuana.

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Hot stocks

Investing in Master Limited Partnerships 2013: Three Stocks with Yields Over 8%

Anyone who wants high-yield stocks in their portfolio should be investing in Master Limited Partnerships (MLPs).

MLPs are special kind of dividend stocks. Technically, MLPs are tax-advantaged limited partnerships whose units are traded on exchanges just like common shares of stock.

But what sets MLPs apart from most stocks is that MLPs pay very high yields – typically 5% to 12%. This is because U.S. law mandates that they pass most of their income on to unit holders.

And yet, because MLPs are limited partnerships, ordinary shareholders do not suffer unlimited liability as they would in a regular partnership and so can treat their investment as if it was in an ordinary company.

That's why investing in MLPs is such a smart strategy for the dividend-hungry investor.

However, the unusual nature of MLPs — their income is not taxed at the partnership level – means the government only allows businesses deemed essential to the U.S. economy and national security to adopt the model.

In practice, that typically means companies engaged in the extraction, storage, and transportation of energy commodities like oil, natural gas, and coal, although MLPs do crop up in other industries, such as shipping.

While knowing how to invest in MLPs is great to boost your income, as stocks they usually don't have a lot of upside unless the underlying commodity experiences a price spike.

Nevertheless, the exceptionally high dividends make investing in MLPs worthwhile for at least a portion of a portfolio.

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Investing Tips

A $22 Billion Industry That Nobody On Wall Street Is Talking About

Suffering from a debilitating condition known as respiratory syncytial virus, the patient lay on the ground wheezing with every tormented breath.

It's a horrible yet common viral condition that brings a high fever, a hacking cough, and progressive difficulty in breathing. Once infected, the prognosis is as dire as it gets.

What's worse, it can strike at any age. In fact, nearly 62.5 million in America alone are susceptible to this devastating respiratory condition.

Not long after, the doctor delivered the bad news: There was nothing more he could do.
The steer would have to be put down.

Situations like this are so common that Bovine respiratory syncytial virus leads to the death of 32 million cattle each year.

It is the single largest source of economic loss to the cattle and dairy industry, costing producers more than $3 billion per year.

It's a small part of $22 billion industry that many investors are completely ignoring. It's called Animal Health and Nutrition.

And it promises to be one of the biggest growth industries in the next three decades.

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Global Investing

A Fantastic Ground Floor Opportunity

Investors should be very excited.

Because it's only once in a very long time that investment watersheds like this happen and you can get some long-term positions at stunning bargains.

Last week Mexico, Chile, Colombia and Peru deepened their "Pacific Alliance" by removing tariffs on 90% of the trade between them, beginning July 1.

Now, there have been many such bilateral trade deals, most of them only moderately important at best. But this one is different.

This one marks the emergence of a genuine investment opportunity in Latin America that isn't Brazil and isn't doomed to collapse within a few years.

For anyone looking for alternatives to a U.S. market that looks increasingly pricey and vulnerable – and that should be you, if it isn't already – you can't miss this opportunity.

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